How the Iran-Israel Conflict Escalated into the Digital Front with Cyberattacks on Banks and Cryptocurrencies

• How Did the Iran-Israel Cyber Conflict Begin?
• What Were the Immediate Impacts of the Cyberattacks?
• How Has Iran Responded to the Cyber Onslaught?
• What’s the Historical Context of This Digital Rivalry?
• What Does This Mean for Global Cybersecurity?
• FAQs: Iran-Israel Cyber Conflict

The long-standing geopolitical rivalry between Iran and Israel has now spilled over into the digital realm, with both nations engaging in an intense cyber warfare campaign. Over the past week, a pro-Israel hacking group claimed responsibility for attacks on Iran’s Bank Sepah and cryptocurrency exchange Nobitex, resulting in financial disruptions and an estimated $81 million crypto theft. Meanwhile, Iran reported over 6,700 DDoS attacks, forcing temporary internet restrictions. This digital escalation marks the latest chapter in a two-decade-long cyber conflict, with historical precedents like the Stuxnet virus underscoring the high stakes of this technological battleground.

How Did the Iran-Israel Cyber Conflict Begin?

The cyber dimension of the Iran-Israel conflict isn’t new—it dates back over 20 years, with both nations leveraging their technological prowess for espionage and sabotage. A pivotal moment came in 2010 with the discovery of Stuxnet, a sophisticated worm attributed to U.S.-Israeli cooperation, which physically damaged Iran’s nuclear centrifuges. Fast forward to June 2025, and the digital front has reignited. On June 17, the hacking group "Predatory Sparrow" (known for previous attacks on Iranian infrastructure) targeted Bank Sepah, a key financial institution allegedly used to circumvent international sanctions. The next day, they breached Nobitex, Iran’s largest crypto exchange, exposing vulnerabilities in the country’s financial defenses.

What Were the Immediate Impacts of the Cyberattacks?

The attacks triggered widespread disruptions. Bank Sepah’s critical systems were compromised, though the bank has yet to comment. Nobitex confirmed unauthorized access to its hot wallets, promising user reimbursements. Blockchain analyst ZachXBT flagged suspicious withdrawals totaling $81 million in crypto assets. Meanwhile, Iran’s state media reported over 6,700 DDoS attacks in 72 hours, overwhelming servers and forcing internet throttling. Citizens faced VPN failures, ATM outages, and online banking glitches, though it’s unclear if these were direct results of the attacks or government countermeasures.

How Has Iran Responded to the Cyber Onslaught?

Iran’s Revolutionary Guard-linked Fars agency acknowledged the attacks but framed them as "ineffective." The government imposed temporary internet restrictions—a tactic previously used during civil unrest—to mitigate damage. Notably, Iran has its own cyber capabilities, having conducted phishing campaigns and disinformation operations against Israel through regional allies like Hamas. However, experts argue Israel holds the upper hand in cyber warfare, with Predatory Sparrow’s repeated successes underscoring this asymmetry.

What’s the Historical Context of This Digital Rivalry?

The Stuxnet attack (2010) set a precedent for kinetic cyber operations, but recent years have seen broader targeting. Since 2021, Predatory Sparrow has disrupted Iranian railroads, gas stations, and even leaked Supreme Leader Khamenei’s purported phone number. These attacks blend technical disruption with psychological warfare, often accompanied by taunting social media posts (e.g., "This is what happens to institutions funding a dictator’s terror fantasies"). Conversely, Iran’s cyber efforts against Israel have been less impactful, often limited to low-success phishing attempts.

What Does This Mean for Global Cybersecurity?

The Iran-Israel cyber conflict exemplifies how geopolitical tensions increasingly play out online. Critical infrastructure—banks, utilities, transport—is now fair game, with attacks causing real-world chaos. The $81 million crypto heist also highlights the vulnerability of digital assets in state-sponsored conflicts. As ZachXBT noted, "When nation-states hack exchanges, it’s not just about money—it’s about sending a message." With both sides likely to escalate, the digital front may soon overshadow traditional warfare.

FAQs: Iran-Israel Cyber Conflict

Which hacking group targeted Iran’s Bank Sepah?

Predatory Sparrow, a pro-Israel hacking group active since 2021, claimed responsibility for the Bank Sepah attack on June 17, 2025.

How much cryptocurrency was stolen from Nobitex?

Blockchain analyst ZachXBT estimated losses exceeding $81 million in crypto assets due to unauthorized hot wallet access.

What was the Stuxnet virus?

A 2010 cyberweapon attributed to U.S.-Israeli collaboration that physically damaged Iran’s nuclear program by sabotaging industrial centrifuges.

Why did Iran restrict internet access?

To mitigate over 6,700 DDoS attacks reported in three days, though the restrictions also affected VPNs and banking services.